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Review of Operations:
Petrochemical Business

Oil Exploration and Production Business
Petroleum Business
Petrochemical Business
Other Businesses
 Petrochemical Business image

FY2014 RESULTS

(Billions of yen)
  Results Year-on-Year Change
Net sales \55.1 Up \3.5
Operating income (loss) \(2.8) Down \3.9
Ordinary income \(7.6) Down \11.3
Impact of inventory valuation \(0.6) Down \0.6
Ordinary Income (Excluding impact of inventory valuation) (loss) \(7.0) Down \10.7

FY2015 PROJECTION (Announced in May 2015)

(Billions of yen)
  Projections Year-on-Year Change
Net sales \57.0 Up \1.9
Operating income \0 Up \2.8
Ordinary income \1.0 Up \8.6
Impact of inventory valuation \0 Up \0.6

FY2014 PERFORMANCE

We ensured production and sales of PX through the stable supply of MX, produced by subsidiaries CM Aromatics Co., Ltd. and Cosmo Matsuyama Oil Co., Ltd., to Hyundai Cosmo Petrochemical Co., Ltd. (HCP), a 50:50 joint venture. The Cosmo Oil Group posted record-high sales volume of MX. In the PX business, HCP worked to reduce the cost of sales by optimizing operations and making capital investments to streamline operations. Despite these initiatives, earnings declined due mainly to the weak market conditions for products. Amid relatively strong conditions for ethylene, Maruzen Petrochemical Co., Ltd. secured profits by maintaining high capacity utilization at its ethylene production facilities.

As a result, net sales in the Petrochemical Business segment were \55.1 billion, up \3.5 billion year on year. The Petrochemical Business segment posted an ordinary loss of \7.6 billion, compared with ordinary income of \3.7 billion in the previous fiscal year.

OUTLOOK FOR FY2015

Cosmo Oil projects year-on-year growth in net sales and ordinary income for the Petrochemical Business in FY2015, on the back of a moderate recovery in prices for PX and MX as well as cost reductions at HCP from energy savings and streamlining. We estimate net sales of \57.0 billion, up \1.9 billion year on year, and ordinary income of \1.0 billion, an improvement of \8.6 billion from the previous fiscal year.


The Cosmo Oil Group Production Volume

(Tonnes/year)
Company Name Ethylene PX Benzene MX
HCP - 1,180,000 250,000 -
Maruzen Petrochemical Co., Ltd. Group 1,293,000 - 598,000 72,000
CM Aromatics Co., Ltd. - - - 270,000
Cosmo Matsuyama Oil Co., Ltd. - - 91,000 30,000
Cosmo Oil Co., Ltd., Yokkaichi Refinery - - - 300,000

* HCP: 50.0% (equity-method affiliate)

* Maruzen Petrochemical Co., Ltd.: 43.9% (equity-method affiliate)

* CM Aromatics Co., Ltd.: 65.0% (consolidated subsidiary)

* Cosmo Matsuyama Oil Co., Ltd.: 100.0% (consolidated subsidiary)

* The ethylene production capacity of the Maruzen Petrochemical Co., Ltd. Group includes the capacity of Keiyo Ethylene Co., Ltd. (768,000 tonnes/year) in which Maruzen Petrochemical Co., Ltd. has a 55% equity interest.

* The ethylene production capacity of the Maruzen Petrochemical Co., Ltd. Group for this period was lower than usual due to scheduled outages for maintenance.

* Cosmo Oil Co., Ltd. and Maruzen Petrochemical Co., Ltd. have 65% and 35% stakes, respectively, in CM Aromatics Co., Ltd.

* Earnings derived from the Yokkaichi Refinery's MX facility is included in the Petroleum Business segment.






Review of Operations:
Petrochemical Business
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